Delhi Rent Control Act, Section 25 read with
Order IX Rule 9 C. P. C., scope of-Whether the dismissal of the earlier suit of
respondent-tenant for default of appearance under Order IX Rule 9 C. P. C. a
bar for an application under section 25 of the Delhi Rent Control Act.

Transfer of tenancy rights by the Official
Liquidator, whether voluntary and did not come under the mischief of section
14(1) (b) of the Delhi Rent Control Act.

HEADNOTE:

The appellant landlord executed a lease in
respect of the disputed premises in favour of respondent 2 for three years as
far back as 1-4-1942. In 1948, a suit was brought by the appellant for eviction
of the tenant for nonpayment of rent on the ground of conversion of the user of
the premises. The suit for possession was however dismissed but a decree dated
31-11-1948 for arrears of rent was passed and it was held that Laxmi Bank was
the real tenant.

Subsequently, the Bombay High Court ordered
the Bank to be wound up and in the winding up proceedings, the High Court
appointed an Official Liquidator who on 16-2-1961 sold the tenancy rights to
respondent No. 1. The sale was confirmed by the High Court on the same date and
as a result thereof respondent No. 1 took possession the premises on 24-2-1961.

On 5-1-1961, the landlord appellant filed an
application under the Delhi Rent Control Act for eviction of Laxmi Bank.

On 31-7-1961, a decree for eviction was
passed in favour of the appellant. On 22-1-1963, respondent No. 1 filed a suit
for declaration that he was a tenant of the landlord appellant. The suit was
dismissed for non-prosecution on 5- 5-1964 and an application to set aside the
ex parte order was also dismissed and the appeal against that order also
failed. Thereafter respondent No. 1 filed an application under Section 25 of
the Delhi Rent Control Act for recalling the warrant of possession issued by
the Court in pursuance of the decree dated 31-7-1961 in favour of the
appellant.

The Rent Controller allowed it on 20-12-1966.
An appeal to the Rent Controller Tribunal was ordered by order dated 25-
11-1968 in favour of the appellant. A second appeal filed by respondent No. 1
to the High Court was allowed in his favour and the Rent Controller's order
allowing recalling of the warrant of possession was restored. Hence the appeal
by special leave by the landlord.

Allowing the appeal, the Court

HELD: 1. The application of respondent No. 1
under Section 25 of the Delhi Rent Control Act is clearly barred by the
principle contained in order IX Rule 9 Civil Procedure Code. It was the
appellant who brought the previous suit which resulted in a decree for eviction
of the tenant on 31-7-1961-a date when the Ist respondent had already taken
possession of the premises by virtue of transfer made by the Official
Liquidator. There is nothing to show that respondent No. 1 was a tenant within
the meaning of Delhi Rent Control 445 Act so as to maintain an application
under section 25 of the Act, when in fact he was an unlawful sub-lessee. [447A,
E, F-G] Suraj Ratan Thirani and Ors. v. Azamabad Tea Co. and Ors. [1964] 6 S.
C. R. 192; applied.

2. The language of section 14(b) of the Delhi
Rent Control Act is wide enough not only to include any sub-lease but even an
assignment or any other mode by which possession of the tenanted premises is
parted. In view of the wide amplitude of s. 14 (b), it does not exclude even in
involuntary sale. [448D-E] In the instant case, the official Liquidator had
merely stepped into the shoes of Laxmi Bank which was the original tenant and
even if the official liquidator had transferred the tenancy interest to
respondent No. 1 under the order of the Court, it was on behalf of the original
tenant. It was undoubtedly a voluntary sale which clearly fell within the
mischief of s. 14 (1) (b) of the Delhi Rent Control Act.

Assuming that the sale by the Official
Liquidator was an involuntary sale, then it undoubtedly became an assignment as
provided for by s. 14 (b) of Delhi Rent Control Act.

Appeal by Special Leave from the Judgment and
Order dated 17. 3. 1969 of the Delhi High Court in SAD No. 2/69.

P. R. Mridul and O. P. Sharma for the
Appellant.

S. K. Bisaria for the Respondent.

The Judgment of the Court was delivered by
FAZAL ALI,J. This appeal by special leave is directed against a judgment of the
Delhi Court and arises out of an application filed by Respondent No. 1 who
claimed to be the tenant of the appellant, recalling the warrant of possession
issued by the Controller in pursuance of a decree dated 31- 7-1961 passed
against the 1st respondent.

The case had a rather chequered career having
passed through several phases. To begin with the landlord-appellant executed a
lease in respect of the disputed premises in favour of Respondent No. 2 for
three years as far back as 1.4.1942. In 1948, a suit was brought by the
appellant for eviction of the tenant for non-payment of rent on the ground of
conversion of the user of the premises. The suit for possession was however
dismissed but a decree dated 31. 11.

1948 for arrears of rent was passed and it
was held that Laxmi Bank was the real tenant. Subsequently, the Bombay High
Court ordered the 446 Bank to be wound up and in the winding up proceedings,
the said High Court appointed an Official Liquidator who on 16.

2. 1961 sold the tenancy rights to Respondent
No. 1-S. N. Jain. This sale was confirmed by the High Court on the same date
and as a result there of respondent No. 1 took possession of the premises on
24.2.1961. On 5. 4. 1961, the land-lord-appellant filed an application under
the Delhi Rent Control Act for eviction of Laxmi Bank. On 31. 7. 1961, a decree
for eviction was passed in favour of the landlord- appellant. On 23-1-1963.
Respondent No. 1 filed a suit for a declaration that he was a tenant of the
landlord-appellant.

This suit was dismissed for non-prosecution
on 5.5.1964 and an application to set aside the ex parte decree was also
dismissed and the appeal against that order also failed.

Thereafter Respondent No. 1 filed an
application under s. 25 of Delhi Rent Control Act (hereinafter referred to as
the Act) for recalling the warrant of possession issued by the Court in
pursuance of the decree dated 31.7.1961 in favour of the landlord.

The present appeal arises out of these
proceedings. The Rent Controller allowed the application and recalled the
warrant of possession by its Order dated 20. 12. 1966. The matter was then
taken up by the landlord in appeal to the Rent Control Tribunal which by its
Order dated 25. 11. 1968 reversed the order of the Rent Controller and
dismissed the tenant's application. A second appeal against the order of
Tribunal was then filed by the tenant to the High Court which reversed the
order of the Rent Control Tribunal and restored the order of the Rent
Controller, hence this appeal by special leave.

Mr. Mridul appearing for the appellant
challenged before us the findings of the High Court on point nos. 1 & 3
which are formulated at page 91 of the judgment of the Delhi High Court. These
points may be extracted thus:- "(1) The application made by the appellant
before the High Court under section 25 was not barred by reason of the
dismissal of the appellants suit for default of appearance under Order IX Rule
9, C.P.C.

(3) The transfer to the appellant by the
Official Liquidator of the tenancy rights being voluntary did not come within
the mischief of section 14(1)(b) of the Act.

In the first place it was argued that so far
as point No. 1 is concerned, the High Court was wrong in holding that the
application of Respondent No. 1 was not barred by the reason of the dismissal
of the appellant's suit for setting aside the ex-parte decree by the principle
of Res Judicata or Order IX Rule 9 C.P.C. It was contended that 447 even if the
previous suit filed by respondent No. 1 for declaration of his status as a
tenant was dismissed for default but as the application for setting aside the
decree also failed, there was an adjudication against the then
plaintiff-respondent No. 1 and therefore the present suit was clearly barred by
the principles of Res Judicata or Order IX Rule 9. At any rate there can be no
escape from the position that the application of respondent No. 1 would be
clearly barred by the principle contained in Order IX Rule 9, C.P.C. In case of
Suraj Ratan Thirani & Ors. v. The Azamabad Tea Co. & Ors.(1) this Court
held thus:

"We are not however impressed by the
argument that the ban imposed by O. IX, r. 9 creates merely a personal bar or
estoppel against the particular plaintiff suing on the same cause of action and
leaves the matter at large for those claiming under him.

Beyond the absence in O. IX, r. 9 of the
words referring "to those claiming under the plaintiff" there is nothing
to warrant this argument. It has neither principle, nor logic to commend it ..
The rule would obviously have no value and the bar imposed by it would be
rendered meaningless if the plaintiff whose suit was dismissed for de fault had
only to transfer the property to another and the latter was able to agitate
rights which his vendor was precluded by law from putting forward." In the
instant case it was appellant who brought the previous suit which resulted in a
decree for eviction of the tenant on 31-7-1961-a date when the 1st respondent
had already taken possession of the premises by virtue of transfer made by the
Official Liquidator. Thus the identity of the subject matter being
substantially the same, this case clearly falls within the ambit of the ratio
in the case supra. On this ground alone therefore the appellant is entitled to
succeed because the High Court with due respect does not appear to have
properly construed the scope of Order IX Rule 9 C.P.C. There is however nothing
to show that respondent No.1 was tenant within the meaning of Rent Control Act
so as to maintain an application under s. 25 of the Act when in fact he was an
unlawful sub-lessee. As regards point No. 3, the High Court relying on a
decision of Calcutta High Court in Krishna Das Nandy vs. Bidhan Chandra Roy(2)
has found that as the transfer in favour of respondent No. 1 by the Official
Liquidator was confirmed by the Court, the status of the tenant by respondent
No. 1 was acquired by operation of law and therefore the transfer 448 was an
involuntary transfer and the provisions of Rent Control Act would not be
attracted. After careful perusal of Calcutta case, in the first place it
appears that the section concerned has not been extracted and we are not in a
position to know what was the actual language of the section of the Bengal Act.
Secondly, in our opinion, the official liquidator had merely stepped into the
shoes of Laxmi Bank which was the original tenant and even if the official
liquidator had transferred the tenancy interest to respondent No. 1 under the
orders of the Court, it was on behalf of the original tenant. It was
undoubtedly a voluntary sale which clearly fell within the mischief of
s.14(1)(b) of the Delhi Rent Control Act. Assuming that the sale by the
official Liquidator was an involuntary sale, then it undoubtedly became an
assignment as provided for by s. 14(b) of Delhi Rent Control Act. S. 14(b) runs
thus:- "14(b)-that the tenant has, on or after the 9th day of June, 1952,
sublet, assigned or otherwise parted with the possession of the whole or any
part of the premises without obtaining the consent in writing of the
landlord." The language of s. 14(b) is wide enough not only to include any
sub-lease but even an assignment or any other mode by which possession of the
tenanted premises is parted.

In view of the wide amplitude of s.14(b) we
are clearly of the opinion that it does not exclude even an involuntary sale. For
these reasons therefore we are unable to agree with the view taken by the High
Court. The appeal is accordingly allowed, the judgment and decree of the High
Court are set aside and the plaintiff's application under s. 25 of the Delhi
Rent Control Act is dismissed.

Mr. Bisaria, learned counsel appearing for
the respondent submitted that as the tenant has been in the premises for a
period of 19 years and is conducting business therein, he may be permitted
sufficient time to make alternative arrangements. Mr. Mridul appearing for the
appellant fairly conceded that he would have no objection if one year's time is
allowed to the respondent provided he gives an undertaking for handing over
peaceful and vacant possession at the expiry of the time. We therefore allow
time to the respondent to vacate the premises on or before 15th April, 1981 on
the condition that he files an undertaking within two weeks to the effect (1)
that he shall hand-over vacant and peaceful possession to the landlord on or
before 15th April, 1981; (2) that he shall not induct any per son on the
premises; (3) that he shall go on paying the compensation for wrongful use of
premises equivalent to the rent.

449 The undertaking must be filed supported
by an affidavit within two weeks from today failing which the order granting
time shall stand revoked.